10-QPeriod: Q1 FY2010

AMETEK INC/ Quarterly Report for Q1 Ended Mar 31, 2010

Filed May 5, 2010For Securities:AME

Summary

AMETEK, Inc. reported financial results for the first quarter of 2010, showing a slight increase in net sales to $556.7 million, up 0.7% from $552.9 million in the prior year quarter. This modest top-line growth was driven by higher order rates, particularly in short-cycle businesses, and was partially offset by a 2% internal sales decline. The company experienced significant international sales growth, up 7.9%, contributing 51.4% of total net sales. Despite the slight sales increase, net income decreased by 2.0% to $57.9 million, resulting in diluted earnings per share of $0.54, down from $0.55 in the first quarter of 2009. This was primarily due to a decrease in segment operating income and an increase in selling, general, and administrative expenses. The company's financial condition remained stable, with a solid cash position and manageable debt levels. AMETEK also highlighted its commitment to returning capital to shareholders through active share repurchase programs.

Financial Highlights

49 data points
Beta

Revenue

$556.66M

Net Income

$57.95M

10.4% Net Margin

EPS (Diluted)

$0.24

Total Assets

$3.23B

Cash & Equivalents

$255.63M

Free Cash Flow

$86.05M

Financial Statements
Beta
Revenue$556.66M
SG&A Expenses$67.54M
Operating Expenses$454.22M
Operating Income$102.45M
Interest Expense$16.75M
Net Income$57.95M
EPS (Basic)$0.24
EPS (Diluted)$0.24
Shares Outstanding (Basic)239.89M
Shares Outstanding (Diluted)242.03M

Key Highlights

  • 1Net sales increased slightly by 0.7% to $556.7 million in Q1 2010, driven by improved order rates.
  • 2Net income decreased by 2.0% to $57.9 million, with diluted EPS at $0.54 compared to $0.55 in Q1 2009.
  • 3International sales showed strong growth of 7.9%, representing 51.4% of total net sales.
  • 4New orders increased by a significant 19.5% to $582.3 million, indicating a recovery from the 2009 economic downturn.
  • 5The company repurchased $67.3 million of its common stock in Q1 2010, demonstrating a commitment to shareholder returns.
  • 6Operating income in the Electronic Instruments Group (EIG) remained flat year-over-year, while the Electromechanical Group (EMG) saw a decrease in operating income and margins.
  • 7The company maintained a strong liquidity position with $255.6 million in cash and cash equivalents at the end of the quarter.

Frequently Asked Questions

The primary driver of AMETEK's sales growth was an increase in order rates, particularly in its short-cycle businesses. This led to a 0.7% increase in net sales compared to the prior year quarter. The company also benefited from international sales growth and contributions from recent acquisitions.

While net sales saw a slight increase, net income and diluted EPS decreased due to a combination of factors. Segment operating income saw a modest decline, and selling, general, and administrative expenses increased. The decrease in operating margins in the Electromechanical Group also contributed to the lower net income.

AMETEK is actively managing its capital through share repurchases, having spent $67.3 million in the first quarter of 2010 to buy back its common stock. The company also maintained a strong cash position of $255.6 million and had $76.1 million available under its share repurchase authorization at the end of the quarter. Debt levels remain manageable, with no significant maturities until 2012.

The company expressed optimism, noting that order rates stabilized in late 2009 and continued to improve in the first quarter of 2010. AMETEK expects operating results for the remainder of 2010 to show further strength compared to 2009, driven by increased orders and sales.